In a legal dispute over the award conditions of the 5G frequency auction 2019, the Federal Administrative Court (BVerwG) sees further need for clarification with regard to the possible influence of the federal government on the actually independent Federal Network Agency. There are “indications that the Federal Ministry of Transport and Digital Infrastructure (BMVI) has tried to a considerable extent, in particular to influence the determination of the supply obligations,” announced the court on Thursday in Leipzig and referred the proceedings initiated by the network operator EWEtel back to the administrative court in Cologne for a reassessment.
The energy supplier and fixed network operator EWE also offers its customers mobile phone tariffs, which it realizes on the basis of advance payments from the mobile network operator. The company had sued the Federal Network Agency because it saw itself at a disadvantage from the access obligations set out in the regulatory authority’s terms and conditions. EWE called for a change in the conditions, which made it clear that service providers are entitled to the full range of services offered by network operators. The mobile phone provider Freenet had also filed a lawsuit against these conditions.
The administrative court in Cologne had dismissed the action in 2019 as inadmissible and justified this, among other things, with the fact that EWE, as a company not directly involved in the procurement procedure, was also not entitled to take legal action against the procurement conditions. In the appeal, the Federal Administrative Court overturned this decision. EWE is entitled to sue because the regulation in the Telecommunications Act (TKG) on which the award conditions are based also protect the interests of third parties.
The administrative court in Cologne now has to negotiate the case again. The Federal Administrative Court gives it an explosive homework: The Federal Administrative Court suspects that politicians – in this case the Federal Ministry of Transport – have unlawfully influenced the independent decision of a federal authority. It still has to be clarified whether there has been a violation of the “independence of the national regulatory authority guaranteed by Union law and whether the presidential chamber’s weighing up is based on irrelevant considerations”.
Consultation outside the process
The Federal Administrative Court also says with rare clarityWhich “irrelevant considerations” it means: The decision of the President’s Chamber of the Federal Network Agency on the design of the award conditions could “have been largely motivated by an agreement made outside the procedure between the BMVI and the three existing mobile network operators”. The network operators could “possibly under the condition of ‘investment-promoting framework conditions’ – such as the waiver of a stricter service provider obligation – have agreed to close supply gaps through the further expansion of the 4G network”.
In plain language: The Federal Administrative Court suspects that the BMVI has messed with the mobile network operators. The accusation of a deal is in the room: the network operators swallow the toad of the comprehensive expansion obligations, the ministry ensures that the network access barriers for third parties are as high as possible. A spokeswoman for the BMVI emphasized to the dpa that there had been no instructions from the ministry “and no other attempt to improperly influence the Federal Network Agency”.
“No impermissible influence”
Politicians have not promised anything, said a spokesman for the Federal Network Agency and emphasized that the authority had “always pointed out in political discussions about the 5G decision that the decision will be made independently”. However, this formulation indicates that the independence of the authority had to be emphasized in the discussions with politicians.
At the 5G auction, Telekom, Telefónica, Vodafone and 1 & 1 bought frequencies for a total of 6.5 billion euros. They committed themselves to minimum expansion targets, for example that by the end of 2022 they would provide 98 percent of the households in each federal state with at least 100 Mbit / s download. On the other hand, the Federal Network Agency waived a fundamental service provider obligation – that would have significantly strengthened the position of the mobile phone providers who do not have their own network.
Dispute negotiation requirement
A negotiation requirement is provided for in the award conditions for third-party providers. This means that the network operators must at least negotiate and listen to an offer with a third-party provider who wants to buy network capacity. This regulation is also disputed in court. Among other things, Telefónica Deutschland took legal action against the award conditions, but was recently rejected by the Federal Administrative Court. On Wednesday, the court rejected a revision by the network operator that was directed against the obligation to negotiate.
In addition, the Federal Administrative Court made it clear “that the negotiation obligation stipulated in the frequency usage regulations is based on a sufficient legal basis”. That is the good news for the Federal Network Agency. On Monday, it committed the network operator Telefónica Deutschland to start serious negotiations with the French IoT provider Transatel about an MVNO (Mobile Virtual Network Operator) access that wants to enter the German market. Telefónica now wants to examine the arrangement.